WTO Appellate Body Sides With US Against EU - Global Trade Magazine
  September 26th, 2017 | Written by

WTO Appellate Body Sides With US Against EU

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  • The EU alleged Washington State tax measures were contingent on Boeing’s use of domestic parts.
  • WTO Appellate Body disagreed tax measured required Boeing to use domestic fuselages and wings.
  • The WTO found in a separate dispute that 28 of 29 US programs challenged by the EU were consistent with WTO rules.

The World Trade Organization (WTO) has issued an Appellate Body report rejecting the case brought by the European Union (EU) alleging that the United States provided prohibited subsidies to Boeing.

The EU challenged seven Washington State tax measures, alleging that they were contingent on Boeing’s use of domestic fuselages and wings instead of imported fuselages and wings. The Appellate Body disagreed, giving the US a complete victory in this dispute.

This finding comes on the heels of a WTO compliance panel finding in June in a separate dispute that 28 of 29 US programs challenged by the EU were consistent with WTO rules. In that dispute, the compliance panel found that only a single Washington State tax program has limited effects contrary to WTO rules. That panel’s findings are now on appeal before the Appellate Body.

These findings in the two aircraft cases brought by the EU contrast with the findings of a different compliance panel in a dispute brought by the United States challenging the EU’s launch aid and other subsidies to Airbus. In September 2016, that WTO compliance panel found that the EU had failed to achieve compliance with its WTO obligations, and had further breached WTO rules by giving Airbus billions of dollars in additional subsidies. The EU subsidies appear to cause tens of billions of dollars in harm to Boeing. The US first brought a case to the WTO over Airbus in 2004.

“European governments have provided billions of dollars in illegal subsidies to Airbus for years, yet they have tried and failed to create a false equivalence with the United States and Boeing.” said US Trade Representative Robert Lighthizer. “The EU cannot justify their own illegal subsidies by hiding behind groundless claims against the US. The EU should immediately come to the table on a solution that will end all its WTO-inconsistent subsidies.”

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